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Useful PPC Tactics for Online Retailers

This entry was written by one of our members and submitted to our YouMoz section.The author's views below are entirely his or her own and may not reflect the views of Moz.

In PPC, the retail industry is one of the toughest areas to crack in terms of managing a successful campaign. There are many reasons for this, as online stores try to stand out from the crowd by holding frequent sales, product giveaways, offering free delivery and distributing voucher codes. Some online shops claim to have year-round sales which are always quite amusing as their prices seem to remain the same.

Searching for a product on Google is just like walking down a high street when the sales are on – SALE NOW ON, 50% OFF, EVERYTHING MUST GO. Don't worry folks, the capitalisation was intended.

Take the above for example, and don't ask me why I was searching for "party dresses". Look at all of the calls to action – Free Returns, 20% Off, Sale, Free Delivery. The below headings will explain some useful PPC tactics that online retailers can use to increase their market share and stay ahead of the game.

1. Product Extensions

Product extensions are a great way to increase click through rate, increase sales and drive targeted traffic to relevant landing pages. With Google's recent announcement of how they are going to put more emphasis on landing page relevance when calculating quality score it is really a no brainer when managing retail PPC accounts. Product extensions area form of sitelinks where Adwords pulls in a relevant feed that appears under the ad text when the + button is pressed (see below).

I have always been baffled as to why some online advertisers do not take advantage of this feature. It appears that the main reason for neglecting this is because they do not have a Google shopping feed. Gasp!

In several instances my clients have benefited from 6-10 extra sales per day from Google shopping, and that doesn't include increases they have seen when adding product extensions. Even if Google shopping brings about one sale a month it's still a free sale. Adding product extensions in Adwords is easy. Just follow these steps:

Log in to your account

If the Ad Extensions tab is not visible on the top bar just click the arrow to find it as shown below.

Use the dropdown box to select product extensions and your Google shopping feed ID should be there.

Then just select the campaigns that you wish to add product extensions to and save.

In my experience product extensions work better with branded campaigns rather than generic ones. For instance, we have seen that product extensions work really well for branded terms such as "dell laptops" and "sony hd tv" but not so well for generic terms such as "laptops" and "hd tv". It is clear to see why this has happened, as the users in the first instance are further down the buying cycle and know which brand they want.

Product Extensions are easy to track and I have found the best way to do it is by manually tagging your URLs. E.g. www.yoursite.com/product.html?origin=product-extension.

2. Product SKUs

A lot of online retailers are missing out on a huge opportunity by ignoring manufacture part numbers or product SKUs. Little by little, advertisers have copped onto this but there are still some markets where it's unrecognised. For models in the electronics market the competition is really fierce. The part number KDL-32CX523, for example has a full set of advertisers bidding on it.

The electronic part number STM32W is less competitive, however. This has only one advertiser bidding on it, and from experience in this market I know that there is massive money to be made from bidding on part numbers. In one example, part numbers accounted for 65% of the companies online PPC revenue, and it is still a function that is ignored by most of the advertisers in that market.

The traffic volumes for these keywords may not be as high as more generic keywords, but these visitors are extremely specific about what they want, and the conversion rate is much higher. All SKUs that an advertiser bids on should also have a specific product landing page.

3. Branded Products

A lot of online retailers sell a wide range of goods including branded products and own brand products. Own brand products are usually bought in from a foreign country or manufactured by the company, and branded products are usually bought from distributors and suppliers. Own brand products can usually be sold at a lower price, as they have been bought in bulk for a discounted price. The competition is usually high for branded products, so margins are subsequently low if a company wishes to remain competitive on price.

When creating a campaign structure for a PPC campaign for an online retailer, I believe that it is best practice to have several generic campaigns and several branded campaigns. For instance for a computer company I would create campaigns like the ones listed below.

Laptops

Desktop Computers

Dell

Apple

For the generic campaigns the split of sales could possibly be 50% branded and 50% own brand. For the branded campaigns there may be no split, and the branded sales would contribute 100% of the sales. For this reason it is extremely important not just to attribute revenue figures against spend per campaign when reporting. This is where finding the final profit figure is very useful, and decisions can be made on whether a campaign is really profitable or not.

Branded campaigns tend to convert better than generic ones but the profit on branded products is usually anywhere between 10% to 20%. For example an online retailer could sell a Sony TV for £1200 and an unbranded TV for £400 and make more money on the unbranded one. Finding the time to compile these reports is quite difficult but once the outline is created it can be very easy.

4. Seasonality

Using seasonality is very important in PPC management. Stepping away from website design during these periods, there are other ways that PPC managers can include seasonality in their accounts.

a. Text Adverts

Including seasonality in text adverts has driven up click through rates for our clients on endless occasions. Using seasonal terms like Christmas in September always leads to a rise in click through rates for our clients. This gets a lot of people excited about the holidays (but really annoys some people as they hate Christmas adverts too early in the year.

b. Spend

Increasing spend at certain periods of the year is also a very important strategy for online retailers. Depending on what you sell, the peak times could be Christmas, January sales, Valentine's Day and Mothers' Day. An advertiser should experience an increase in sales at these times, but to take real advantage of seasonality should be willing to increase their spend. There are also certain months during which an online retailer is busy and it is important to look at historical data in the account if possible to see when the peak times are.

c. Charity

Charity really seems to hit home around the holidays, so any online retailers who donates to charity every time a purchase is made should see an increase in sales. This may be the overcoming factor as to whether a customer chooses your company or another.

External Studies

There are always external studies and reports being put together by market insiders on different sectors. These reports will aid a PPC manager in deciding what audience to target, and I have found them very useful in the past.

For example, while doing research for a recent proposal for a fragrance company, a study outlined that over 50% of women buy fragrances for their partners or relatives, and 34% of men usually get fragrances as a gift. This is very insightful information and gave us food for thought when putting forward creative ideas for the Google Display Network. The question was: "do we go for a male creative or a female creative?". Our proposal was to test both and see what results came back. The results are yet to be seen, but we will let you know as soon as they are in.

Conclusion

The online retail space is cluttered with competitor websites willing to do anything to take your business from you. Price cuts, brand bidding and continuous promotions make it tough to compete but keep you on your toes. The above insights should give you some food for thought when managing your online retail PPC campaigns. There are many more techniques out there, and I would love to hear them in the comments section.

About DanRoche1985 —
My name is Dan Roche and I am a PPC Specialist at the online marketing agency PushON.

27 Comments

Just to add on from the above, Product Listing Ads have now been launched for UK advertisers. A colleague suggested that I add this in and I totally agree. This is done on a CPA model therefore an advertiser sets their bid (maximum they are willing to pay for a sale) then Google pulls the product listing from the Google Merchant account and puts it in the paid search results. There are no keywords or ad text involved which may seem more attractive to advertisers than using Product Extensions.

It is too early to say whether this works or not in the UK so if any of the American readers would like to share their experience with this feature please do.

Nice Post Dan - Point 3 regarding branded Products is a little confusing they way you present it but i'm pretty sure I know what you were getting at!

We do this as well where we might be selling a branded product - let's use a Cisco 24-Port Switch as an example:

We create a branded Adgroup for this product - we group together the product and associated service/support skus and various product specific phrases that contain the brand name in this adgroup. The destination URL will be directly to the product page where the customer can make a purchase.

Then we create a more generic Adgroup were we have keywords like "switch" and "24-port switch." Ideally we have the generic adgroup take users to a destination landing page where we have more generic product information, buying tools, videos, feature comparisons and other various resources. These customers are typically still in discovery/research mode and we need to push them to a buying decision.

In both cases you really need to look at your competitive landscape. When a customer is searching by SKU or specific product names, they typically have done their initial research and are looking for the best price. If you win on price it would be beneficial to max out your spend on the branded adgroup. In more generic keyword adgroups, the landing page is key. You want interaction, longer page views and hopefully a phone call into your sales team to close the deal. I also find it beneficial to go after the long tail in your generic adgroup where you can find some great wins at a low cost.

Thanks Jamie. Reading ot back it does look a little confusing and you make some very good points.

The main point that I was trying to get accross was that a lot of online retailers have 2 types of products. For example a clothing retailer may stock Nike, Adidas and Tommy Hilfiger products. Campaigns would be created for these landing users on a branded landing page. On the other hand they may have a range which is unbranded that they have bought in bulk for a discounted price. The profit margin on the Adidas stuff may only be 10% but the profit margin on the unbranded stuff may be 50%.

A lot of PPC managers only measure spend against revenue which includes VAT and carriage and is not the true figure. The way to see if a campaign is profitable is to drill down and measure spend against profit.

I agree when a customer searches by SKU they are looking for the best price but if your the only advertiser bidding on that term then I believe that you will gain some sales from a term that has a low CPC.

Great post. I love seeing a PPC post here and not just SEO! You have some great points and suggestions.

Most of the features are very easy to implement into a PPC campaign, it should be a norbrainer. Implement & Track, you should see a difference. Thank god not everyone is using them, this actually helps with making my clients ads stick out from the crowd.

Every client is different, even in retail. I think its good to have a nice toolbook of options and create a custom plan based upon the clients specific needs.

Thanks Andrew.
It will be interesting because I have always bid on a CPC basis rather than a CPA basis as I believe that you have more control over your account this way and its more manual. I will test the new Product Listing Ads though, nothing lost of they don't work (ohh apart from a few quid).

What are your thoughts on Seller Ratings? Although they aren't the easiest to implement, it seems like it would be an obvious way to increase CTR, but is it worth sacrificing the other extention options?

Thanks for your comment. As I said above I haven't used seller ratings before but I definitely think that they would lead to high click throughs. An advertiser with a 4-5 star rating looks more trustworthy and personally I would be more inclined to buy from them. In this day and age a lot of people are still sceptical of buying from an internet company and anything that helps put their mind at ease should not only increase clicks but also conversions.

I don't think that you would have to sacrifice either extensions but you could test them against each other and see which works best for your industry. Features like this are great to test as an advertiser can hit a click through rate and remain stagnant and not increase. Has anyone used seller ratings?

This is a great round-up! Thanks for sharing Dan! I too am surprised when I see a retailer spending a ton of money on PPC but not utilizing some of the above techniques. I think part of the reason is around education - when a lot of these rolled out they did so in certain verticals for a while than just for some advertisers, etc. The usual roll out game, and I think there was a lot of confusion on when they opened to everyone. I also think in general PPCers sometimes get nervous about unleashing new formats not knowing if they will be around forever, or if this is a fleeting test layout.

You are so right though -- these techniques are pretty much required if you want to compete these days. Often it simply takes no more than a few hours to get set up and a lot of these can run with less managament than some of the other features we all have available. I love that you brought up SKUs -- way too many advertisers overlook this because it takes time to get the logic together to build out the keyword list, but that long tail traffic is SO qualified, and often you can gain where you competitors are being lazy.

Hi Joanna. Thanks for the lovely comment. I know what you mean about some of the Adwords features and whether they have longevity or are just a flash in the pan. I try and jump on anything new there is, test it and see whether its worthwhile rolling it out. Some PPC accounts become a bit stagnant if things are going well and its obvious that the competition are not far behind so new methods are a must.

I know a lot of affiliates who have started bidding on SKU's and it can be evry profitable if you find a merchant who allows PPC and direct linking to their site. Very hard to come by nowadays though.

Hey Dan, good article, we have had some great success with positive reviews showing from google product search in the ads. Again, it just helps the ad stand out from the others. Going to go and have a play with some ad extensions now though & will report back if I can squeeze some more performance out of it. :)

Thanks for the comment Marcus and it would be great to see what results you get. The product review feature is something that I have never used. How do you go about this? This does make an advert more attractive to click on, especially if they have 4-5 stars. I did work for a company in the past which steered clear of review based advertising as they had hundreds of bad reviews on well known review sites.

Thanks for the comment. Site links are a great way of increasing CTR and landing users on targeted landing pages. The only thing with site links is that if you are in a competitive industry and your client/business does not have a lot of budget then it is hard to rank in the top 3 for keywords so site links will not show. This is where having both site links and product extensions enabled works well as product extensions show no matter what position an advertiser appears.

I have had this trouble before and I ended up renaming some of the products in the Google Shopping feed. If your doing things on a large scale then its definitely worth it. The results that I have seen for branded searches has been great e.g. Dell Laptops. You can also measure the clicks and conversions of product extensions and site links through Google Adwords by going to the campaigns tab, clicking segment and selecting click type from the dropdown menu. You probably already know this but thought I would just drop this in.

Thanks Mitch. Let me know if you need any help trying to convince the powers that be to increase their marketing budgets. Unfortunately I have been in the same situation in the past and it is extremely frustrating.

interesting on the skus ...would you say putting an sku in adcopy industry based or does it work for all retailers? One of my clients sells soccer gears online and he puts the product model name in ads but not the skus. I don't even know if the sku pubished on their site is the one manufactore gave!

Hi. I think that if a user searches for a sku on a search engine then it should be dynamically inserted into the title of the ad text. It really depends on the brand that an advertiser is promoting. Popular brands such as Sony and Panasonic may have higkhly searched SKU's as they publish these codes in their offline brochures. Other brands with lower brand awareness may not have as much search around their sku's.

To match up the sku's on the site the retailer should get a product export from the manufacturer and match them up.